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Reserves position below safety line

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The official foreign reserves position continues to remain precarious standing at 2.9 months of import cover mainly on account of dwindling revenue from tobacco.

An update from the Reserve Bank of Malawi shows that despite the progress made in offloading tobacco at the auction floors, the foreign reserves position continues to be below the accepted three months of import cover.

According to RBM, the gross official reserves declined during the week ending May 13, 2016 to stand at $601.29 million as at May 18, 2016.

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However, there is hope that the situation is likely to improve on account of improvements in prices and volumes of tobacco passing through the floors.

Tobacco Control Commission Chief Executive Officer, Albert Changaya, said despite the market starting on a low note, prices are likely to improve soon. Changaya said the auction floors have seen an improvement in terms of quality of the leaf which gives positive hope that the prices will also start improving soon.

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